The big fix

Reps rush in as corporate America seeks a Hollywood makeover

Who’s your agent?

The question is suddenly popping up at annual shareholders meetings all across corporate America.

Delta, Hasbro, Starbucks, Visa, General Motors and American Express: These are among the A-list companies enlisting Hollywood reps to help them gain access to stars, the inside track on showbiz trends, hot pics and sitcoms.

William Morris has 26 corporate clients on retainer. CAA has 11. Endeavor 10. UTA seven. But Hollywood representation doesn’t come cheap.

Most companies pay their agencies a monthly retainer ranging from $25,000 to $50,000, and running as high $300,000 for bigger companies or a wider-range of service.

The union is potentially great for both sides. Coca-Cola’s CAA marriage led to a powerful tie-in with “American Idol.”

But the payoff isn’t always obvious. Sometimes the only result is an event hosted by an agency client or a product placement deal that skeptics say could have been as easily arranged without an agency on the payroll.

Some of these corporations even hope that Hollywood-style marketing will be a salve for economic problems that Hollywood is powerless to fix.

With the commercial airline business in crisis, Delta has doubled its marketing budget and signed with CAA.

General Motors, whose stock has plunged alongside sales, has William Morris at work massaging its brand.

What’s really in it for corporate America?

In a word, marketing.

A fragmenting ad environment, iPods, cell phones and TiVos: these trends have all left companies deeply disenchanted with traditional advertising.

Many see the big Hollywood agencies — with their robust movie, music, TV, book and theater divisions — as a silver bullet.

They’re adding Hollywood reps to the roster of traditional ad firms, communications and PR outfits they’ve traditionally employed to wave their logos in front of consumers.

“I think talent agencies are sort of trying to push themselves into the advertising business,” says Madison Avenue guru Jerry Della Femina of Della Femina Rothschild Jeary and Partners Advertising. “And clients are always looking for a miracle, a way out.”

Talent agencies are adding clients and beefing up their marketing groups. One tenpercentery says inquiries from companies for representation are up 100% in a year.

The upshot: UTA and Amazon.com are launching an online talk show with Bill Maher on June 1. WMA is scouting lit, film and music properties for Starbucks. Working for toy giant Hasbro, CAA has brokered deals for a Transformers tentpole at DreamWorks and a G.I. Joe pic at Paramount.

Amex, repped by Endeavor, has gotten lots of buzz for its TV commercials featuring Wes Anderson, Kate Winslet and Ellen DeGeneres — none of whom are Endeavor clients — and Martin Scorsese, who is. Scorsese also directed a Robert De Niro spot. Endeavor worked closely with Amex’s ad agency Ogilvy & Mather on the campaign.

“It’s a very broad, teamwork approach,” says Mark Dowley, head of Endeavor MarketingSolutions.

Endeavor also paired client Martha Stewart Living Omnimedia with builder KB Homes on a hit line of Stewart designer houses.

At the center of talent agency efforts is the idea that a company needs personality: that a brand is as valuable as a company’s physical and financial assets in a fast-moving, global environment.

What agencies can pitch is their access to vast amounts of information, from TV shows in development to studio projects to superstar whims. Or it is a simple matter of linking company to performer.

“The greatest goal is to create 360-degree immersion in our brand,” says Brian Goldner, chief operating officer at giant toymaker Hasbro. He cited some of the company’s best-known games — Monopoly, Life, Battleship, Clue. “They all need to be continually reinvented” via TV, movies, videogames.

Delta may be a tougher nut.

The airline has lost more than $14 billion over the past five years and filed for bankruptcy last fall.

What has it done to address this problem? It has doubled its marketing spending, dumped its ad agency Ogilvy & Mather and dropped its tagline “The Good Goes Around.” It also hired hot ad shop Shepardson Stern & Kaminsky, which is partly owned by CAA.

“No one wants to hear how often we fly, how many places we fly,” says Delta marketing chief Tim Mapes. “It’s ‘We’ve got 24 channels, pay-per-view, MP3.’ That’s what matters.”

Delta is now repped by CAA as well, joining Starwood Hotels and Resorts as companies that are using both SS&K and the talent agency.

“The airline business … has not been a bastion of excellence in image,” Mapes says. Airlines “behave as commodities and they are seen as commodities. You have to bring relevance and energy to a brand that has lacked that in recent years.”

Lenny Stern, who heads CAA’s corporate marketing group, was a founding partner of SS&K, and now wears two hats. The ad shop was key to launching Song, Delta’s hip but now defunct low cost subsid, and did everything from choosing the color palette to creating a specialty cocktail.

But for all its style, Song didn’t take flight. The low-cost carrier was folded back into Delta’s operations last fall. (As one marketing blogger put it, “Song was too busy crafting a brand ethos to think about being a business.”)

Agencies have long seen corporate representation as an area ripe for growth. Not only is there the promise of a substantial new source of retainers or commissions, but it also puts the big tenpercenters in a different league, showing that their expertise is more important than simply finding a movie for an actor.

Perhaps the most famous of all deals was when Michael Ovitz landed the Coca-Cola account 15 years ago. Coke and CAA parted ways for a time, and Coke returned six years ago. The retainer it pays CAA has fluctuated, reaching a reported $400,000 a month at one time, but has since been sharply reduced.

Coca-Cola, which turns 120 this year, saw sales of fizzy soft drinks, its core business, fall last year for the first time since 1985. So last month, Coke boosted its global marketing budget ($2.4 billion in ’05) by 20%. It changed its tagline to “The Coke Side of Life.” And it continues to rely on CAA.

Companies also seek agencies for their bread and butter work of finding them film and television properties — just as an actor or director would.

Starbucks, which has had great success selling CDs, watched its first Hollywood foray, a much ballyhooed marketing campaign for Lionsgate’s “Akeelah and the Bee,” sputter.

Starbucks brass was said to be stunned by how little impact its marketing efforts had. The coffee giant has since inked a deal with William Morris, which is searching for new entertainment ventures.

Agencies often play the role of gatekeeper for powerful congloms, which face a hail of requests for entertainment tie-ins.

“It’s part of what they pay us for. To tell them what not to do,” says CAA’s Stern.

“CAA helps us weed through the stuff,” says Tricia Bouzigard, senior manager of entertainment marketing for the wireless company Boost Mobile.

“Everybody has something to sell you,” she says. “Unsolicited material is a whole other area of concern. (With CAA) it’s prescreened and validated.”

Ken Lombard, head of Starbucks Entertainment, professes to be satisfied with the performance of “Akeelah.” He says Starbucks hasn’t yet chosen its next film campaign. But entertainment in all its forms — including another foray into film — is certain to be part of the corporate road map as the coffee chain evolves into a lifestyle/entertainment hub. WMA, he says, is not on retainer but will be scouting for projects.

Most corporations come to Hollywood expecting not an Oprah-style makeover but an edge on the latest marketing channels.

Working for GM, alongside ad firm Leo Burnett, WMA’s consulting unit led by Paul Bricault and Johnny Levin helped engineer a place for Cadillac in an award-winning marketing campaign for the MGM pic “Be Cool.”

Spots featured “Be Cool” star and WMA client John Travolta soliciting five-second films for an online contest. “Everyone has a five-second idea in them,” Travolta says in the spot.

Steve Tihanyi, GM’s general director for marketing alliances and entertainment, says he hired William Morris full-time last fall “to serve as the arms and legs for us out in Hollywood” after working on one-time projects with the agency over several years.

WMA is working with GM on “a significant motion picture integration” for an ’07 pic Tihanyi declined to name.

“We’re taking a much more active, creative approach to how we work with branded entertainment,” he says.

Endeavor’s Dowley says: “The advertiser and marketer want to get as close to the tree as possible, (not) sit there after everyone has made the decision on what everyone is going to watch and then decide how to buy around it.”

He’s referring to the annual TV network upfronts in Gotham in May, where nets unveil fall lineups for advertisers and start inking deals. This year, behemoth Johnson & Johnson opted to bow out, an unprecedented snub by such a big advertiser. It did much to exacerbate the usual chatter surrounding the upfronts about the increasing obsolescence of TV advertising.

Endeavor, like CAA, has deep financial ties to Madison Avenue. Dowley’s division is partly owned by giant ad agency Interpublic. (He used to head IPG’s Sports and Entertainment Group).

Thanks in part to their convergence with traditional ad shops, talent agencies say they want to avoid alienating Madison Avenue, as CAA did under Ovitz when the agency shot TV commercials for Coke. Talent agents all swear they will not make TV spots.

But some ad vets are wary. “Remember, Hitler said he only wanted the Sudetenland,” jokes Della Femina.

Aside from the “no commercials” mantra, talent agencies’ approaches differ widely.

CAA, William Morris and Endeavor have dedicated marketing divisions and bring agents in when needed.

UTA doesn’t have a separate corporate consulting department. One agent, Sarah Warda acts as a liaison for corporate clients, who are paired with teams of other agents throughout UTA. For instance, the percentery has 14 agents working on the Amazon account.

UTA co-founder and board member Peter Benedek oversees the key accounts. Lisa Jacobson, who heads the agency’s branding and marketing efforts on behalf of clients, has helped launch companies, like Gwen Stefani’s clothing and accessories line LAMB, and Nuala, Christy Turlington’s yoga apparel line for Puma.

ICM, which formed a global branded entertainment division three months ago, has another philosophy altogether. It won’t represent companies, but sticks to sussing out corporate partners for its current entertainment clients.

That’s a shift for ICM, which used to represent Mercedes-Benz and other corporate clients.

“We felt that the core business of ICM was not to represent the brands,” says Lori Sale, its new marketing chief. “I think Coke has 350 agencies. The last thing a brand needs is another agency.”

Agencies still must counter skepticism that spending on their services entails a leap of faith. That “get me into entertainment” concept is amorphous, hard to execute, hard to measure. And no campaign can help Coke or any company if its strategy is not sound.

“I still don’t know if a talent agency is the answer,” Della Femina says. “Maybe they should all go to Lourdes and pray for a miracle.”

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